EXHIBIT 10.5
GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT (the "Guaranty Agreement" or the
"Guaranty"), dated as of August 26, 1996, is made by ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇
▇▇▇▇▇▇, jointly and severally (collectively, the "Guarantors") to ARMOR
HOLDINGS, INC. (the "Company").
W I T N E S S E T H:
WHEREAS, DEFENSE TECHNOLOGY CORPORATION OF AMERICA ("DTCOA")
desires to sell certain of its assets to the Company pursuant to the Asset
Purchase Agreement, dated the date hereof (the "Asset Purchase Agreement"),
between DTCOA, the Company and the other parties thereto;
WHEREAS, the Company is not willing to enter into the Asset
Purchase Agreement without the Guarantors executing and delivering this
Guaranty; and
WHEREAS, the Guarantors desire that the Company enter into
the Asset Purchase Agreement and are willing to execute and deliver this
Guaranty in connection therewith.
NOW, THEREFORE, in order to induce the Company to enter into
the Asset Purchase Agreement, the Guarantors, jointly and severally, agree as
follows:
1. Guaranty. The Guarantors, jointly and severally,
hereby unconditionally, absolutely, continually and irrevocably
guarantee to the Company the payment and performance in full of the
Guaranteed Obligations (as defined below). For purposes of this
Guaranty Agreement, "Guaranteed Obligations" means: the obligation
of DTCOA to perform and fulfill its covenants and obligations to
the Company, including, but not limited to, any indemnification
obligations, pursuant to the Asset Purchase Agreement. The
Guarantors' obligations to the Company under this Guaranty
Agreement are hereinafter collectively referred to as the
"Guarantors' Obligations."
The Guarantors agree, jointly and severally, that
they are liable for the Guaranteed Obligation to the same extent as if each was
the primary obligor thereof.
2. Payment. In the event that the DTCOA incurs any liability
to the Company pursuant to the Asset Purchase Agreement, then the Guarantors,
jointly and severally, upon demand thereof by the Company or its successors or
assigns, will, within three (3) business days of such demand, fully pay to the
Company an amount equal to such liability.
3. Unconditional Obligations. This is a guaranty of payment
and not of collection. The Guarantors' Obligations under this Guaranty
Agreement shall be absolute and unconditional irrespective of the validity,
legality or enforceability of the Asset Purchase Agreement, and shall not be
affected by any action taken under the Asset Purchase Agreement or any other
agreement between the Company and DTCOA or any other person, in the exercise of
any right or power therein conferred, or by any failure or omission to enforce
any right conferred thereby, or by any waiver of any covenant or condition
therein provided, or by any acceleration of the maturity of any of the
Guaranteed Obligations, or by the sale, merger, consolidation, dissolution or
liquidation of DTCOA or any transfer or disposition of all or substantially all
the assets of DTCOA or by any extension or renewal of the Asset Purchase
Agreement, in whole or in part, or by any modification, alteration, amendment
or addition of or to the Asset Purchase Agreement, or any other agreement
between the Company and DTCOA or any other person, or by any other circumstance
whatsoever (with or without notice to or knowledge of the Guarantors) which may
or might in any manner or to any extent vary the risks of the Guarantors, or
might otherwise constitute a legal or equitable discharge of a surety or
guarantor; it being the purpose and intent of the parties hereto that this
Guaranty Agreement and the Guarantors' Obligations hereunder shall be absolute
and unconditional under any and all circumstances and shall not be discharged
except by payment as herein provided, or by express written release by the
Company as to any specific claim hereunder, it being understood that any such
release shall not constitute a release of the Guarantors of their remaining
obligations pursuant to this Guaranty.
4. Currency and Funds of Payment. The Guarantors hereby
guarantee, jointly and severally, that the Guarantors' Obligations will be paid
in lawful currency of the United States of America and in immediately available
funds, regardless of any law, regulation or decree now or hereafter in effect
that might in any manner affect the Guaranteed Obligations, or the rights of
the Company with respect thereto as against DTCOA, or cause or permit to be
invoked any alteration in the time, amount or manner of payment by DTCOA of any
or all of the Guaranteed Obligations.
5. Events of Default. In the event that (a) either of the
Guarantors shall file a petition to take advantage of any insolvency statute;
(b) either of the Guarantors shall commence or suffer to exist a proceeding for
the appointment of a receiver, trustee, liquidator or conservator of itself or
of the whole or substantially all of its property; (c) either of the Guarantors
shall file a petition or answer seeking reorganization or arrangement or
similar relief under the Federal bankruptcy laws or any other applicable law or
statute of the United States of America
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or any state or similar law of any other country; (d) a court of competent
jurisdiction shall enter an order, judgment or decree appointing a custodian,
receiver, trustee, liquidator or conservator of either of the Guarantors or of
the whole or substantially all of its properties, or approve a petition filed
against either of the Guarantors seeking reorganization or arrangement or
similar relief under the Federal bankruptcy laws or any other applicable law or
statute of the United States of America or any state or similar law of any
other country, or if, under the provisions of any other law for the relief or
aid of debtors, a court of competent jurisdiction shall assume custody or
control of the Guarantors or of the whole or substantially all of its
properties and such order, judgment, decree, approval or assumption remains
unstayed or undismissed for a period of thirty (30) days; (e) there is
commenced against either of the Guarantors any proceeding or petition seeking
reorganization, arrangement or similar relief under the Federal bankruptcy laws
or any other applicable law or statute of the United States of America or any
state, which proceeding or petition remains unstayed or undismissed for a
period of thirty (30) days; (f) any default shall occur in the payment of
amounts due hereunder; or (g) any other default shall occur hereunder which
remains uncured or unwaived for a period of ten (10) days (each of the
foregoing an "Event of Default" hereunder); then at the Company's election and
without notice thereof or demand therefor, so long as such Event of Default
shall be continuing, the Guarantors' Obligations shall immediately become due
and payable.
6. Suits. The Guarantors from time to time shall pay to the
Company, jointly and severally, within three (3) business days of demand by the
Company therefor, at the Company's address set forth in the Asset Purchase
Agreement, the Guarantors' Obligations as they become due on their due date,
whether as a result of the passage of time or by acceleration following the
occurrence of an event of default by DTCOA under the Asset Purchase Agreement,
and in the event such payment is not so made, the Company may proceed to suit
against either or both of the Guarantors. At the Company's election, one or
more and successive or concurrent suits may be brought hereon by the Company
against the Guarantors, or either of them, whether or not suit has been
commenced against DTCOA, and whether or not the Company has taken or failed to
take any other action to collect all or any portion of the Guaranteed
Obligations.
7. Set-Off and Waiver. The Guarantors waive any right
to assert against the Company as a defense, counterclaim, set-off or cross
claim, any defense (legal or equitable) or other claim which such Guarantors may
now or at any time hereafter have against DTCOA or the Company, other than any
defense then otherwise available to DTCOA pursuant to the Asset Purchase
Agreement. If at
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any time hereafter the Company employs counsel for advice or other
representation to enforce the Guarantors' Obligations that arise out of an
Event of Default, then, in any of the foregoing events, all of the attorneys'
fees and disbursements arising from such services and all expenses, costs and
charges in any way or respect arising in connection therewith or relating
thereto shall be paid by the Guarantors, jointly and severally, to the Company,
on demand.
8. Waiver; Subrogation.
(a) The Guarantors hereby waive notice of the
following events or occurrences: (i) the Company's acceptance of this Guaranty
Agreement; (ii) the Company or DTCOA heretofore, now or at any time hereafter,
obtaining, amending, substituting for, releasing, waiving or modifying the
Asset Purchase Agreement; (iii) presentment, demand, notices of default,
non-payment, partial payment and protest; (iv) the Company heretofore, now or
at any time hereafter granting to DTCOA (or any other party liable to the
Company on account of the Guaranteed Obligations) any indulgence or extensions
of time of payment of the Guaranteed Obligations; and (v) the Company
heretofore, now or at any time hereafter accepting from DTCOA or any other
person, any partial payment or payments on account of the Guaranteed
Obligations or any collateral securing the payment thereof or the Company
settling, subordinating, compromising, discharging or releasing the same. The
Guarantors agree that the Company may heretofore, now or at any time hereafter
do any or all of the foregoing in such manner, upon such terms and at such
times as the Company, in its sole and absolute discretion, deems advisable,
without in any way or respect impairing, affecting, reducing or releasing the
Guarantors from the Guarantors' Obligations, and the Guarantors hereby consent
to each and all of the foregoing events or occurrences.
(b) Each of the Guarantors hereby agrees that
payment or performance by such Guarantor of the Guarantors' Obligations under
this Guaranty Agreement may be enforced by the Company upon demand by the
Company to such Guarantor without the Company being required, each Guarantor
expressly waiving any right it may have to require the Company, to prosecute
collection or seek to enforce or resort to any remedies against DTCOA, IT BEING
EXPRESSLY UNDERSTOOD, ACKNOWLEDGED AND AGREED TO BY THE GUARANTORS THAT DEMAND
UNDER THIS GUARANTY AGREEMENT MAY BE MADE BY THE COMPANY, AND THE PROVISIONS
HEREOF ENFORCED BY THE COMPANY, EFFECTIVE AS OF THE FIRST DATE ANY OF THE
GUARANTEED OBLIGATIONS IS NOT PAID BY DTCOA UNDER THE ASSET PURCHASE AGREEMENT.
The Guarantors' Obligations shall in no way be impaired, affected, reduced, or
released by reason of the Company's failure or delay to do or take any of the
acts, actions or things described in this Guaranty including, without limiting
the generality of the
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foregoing, those acts, actions and things described in this
Section 8.
(c) The Guarantors further agree with respect to
this Guaranty that each such Guarantor shall have no right of subrogation,
reimbursement or indemnity until such time as all of the Guaranteed Obligations
have been fully, finally and indefeasibly paid in full.
9. Effectiveness; Enforceability. This Guaranty Agreement
shall be effective as of the date hereof, and shall continue in full force and
effect until the Guaranteed Obligations have been fully, finally and
indefeasibly paid in full or until the Company has furnished Guarantors with a
written release of their obligations hereunder, whichever shall first occur.
This Guaranty Agreement shall be binding upon and inure to the benefit of the
Guarantors and the Company and their respective successors and assigns.
Notwithstanding the foregoing, Guarantors may not, without the prior written
consent of the Company, assign any rights, powers, duties or obligations
hereunder. Any claim or claims that the Company may at any time hereafter have
against the Guarantors under this Guaranty Agreement may be asserted by the
Company by written notice directed to the Guarantors at the addresses specified
herein.
10. Representations and Warranties. The Guarantors, jointly
and severally, warrant and represent to the Company that they are duly
authorized to execute, deliver and perform this Guaranty Agreement; that this
Guaranty Agreement is legal, valid, binding and enforceable against each such
Guarantor in accordance with its terms except as enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors' rights generally and by general equitable
principles; and that each such Guarantor's execution, delivery and performance
of this Guaranty Agreement does not violate or constitute a breach of any
agreement to which such Guarantor is a party, or any applicable laws.
11. Expenses. Each Guarantor agrees to be liable,
jointly and severally, for the payment of all fees and expenses,
including attorney's fees and expenses, incurred by the Company in
connection with the enforcement of this Guaranty Agreement.
12. Reinstatement. Each Guarantor agrees that this
Guaranty Agreement shall continue to be effective or be reinstated,
as the case may be, at any time payment received by the Company
under the Asset Purchase Agreement or this Guaranty Agreement is
rescinded or must be restored for any reason.
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13. Counterparts. This Guaranty Agreement may be
executed in any number of counterparts, each of which shall be
deemed to be an original as against any party whose signature
appears thereon, and all of which shall constitute one and the same
instrument.
14. Reliance. Each Guarantor represents and warrants to the
Company that: (a) such Guarantor has adequate means to obtain from DTCOA, on a
continuing basis, information concerning DTCOA and DTCOA's financial condition
and affairs and has full and complete access to DTCOA's books and records; (b)
such Guarantor is not relying on the Company, its agents or other
representatives, to provide such information, now or in the future; (c) such
Guarantor is executing this Guaranty Agreement freely and deliberately, and
understands the obligations and financial risk undertaken by providing this
Guaranty; (d) such Guarantor has relied solely on such Guarantor's own
independent investigation, appraisal and analysis of DTCOA and DTCOA's
financial condition and affairs in deciding to provide this Guaranty and is
fully aware of the same; and (e) such Guarantor has not depended or relied on
the Company, its agents or other representatives, for any information
whatsoever concerning DTCOA or DTCOA's financial condition and affairs or other
matters material to such Guarantor's decision to provide this Guaranty or for
any counselling, guidance, or special consideration or any promise therefor
with respect to such decision. Each Guarantor agrees that the Company has no
duty or responsibility whatsoever, now or in the future, to provide to such
Guarantor any information concerning DTCOA or DTCOA's financial condition and
affairs, and that, if such Guarantor receives any such information from the
Company, its agents or other representatives, such Guarantor will independently
verify the information and will not rely on the Company, its agents or other
representatives, with respect to such information.
15. Termination. This Guaranty Agreement and all
obligations of the Guarantors hereunder shall terminate without
delivery of any instrument or performance of any act by any party
on the date when all of the Guaranteed Obligations have been fully,
finally and indefeasibly paid in full.
16. Governing Law.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK APPLICABLE TO CONTRACTS EXECUTED, AND TO BE
FULLY PERFORMED, IN SUCH STATE.
(b) EACH PARTY HEREBY EXPRESSLY AND IRREVOCABLY
AGREES AND CONSENTS THAT ANY SUIT, ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT AND THE
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TRANSACTIONS CONTEMPLATED HEREIN MAY BE INSTITUTED IN ANY
STATE OR FEDERAL COURT SITTING IN THE ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇,
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ OF AMERICA AND, BY THE
EXECUTION AND DELIVERY OF THIS AGREEMENT, EXPRESSLY WAIVES
ANY OBJECTION THAT IT MAY HAVE NOW OR HEREAFTER TO THE LAYING
OF THE VENUE OR TO THE JURISDICTION OF ANY SUCH SUIT, ACTION
OR PROCEEDING, AND IRREVOCABLY SUBMITS GENERALLY AND
UNCONDITIONALLY TO THE JURISDICTION OF ANY SUCH COURT IN ANY
SUCH SUIT, ACTION OR PROCEEDING.
(c) EACH PARTY AGREES THAT SERVICE OF PROCESS MAY BE
MADE BY PERSONAL SERVICE OF A COPY OF THE SUMMONS AND
COMPLAINT OR OTHER LEGAL PROCESS IN ANY SUCH SUIT, ACTION OR
PROCEEDING, OR BY REGISTERED OR CERTIFIED MAIL (POSTAGE
PREPAID) TO THE ADDRESS OF SUCH PARTY PROVIDED HEREIN OR BY
ANY OTHER METHOD OF SERVICE PROVIDED FOR UNDER THE APPLICABLE
LAWS IN EFFECT IN THE STATE OF NEW YORK.
(d) NOTHING CONTAINED IN SUBSECTIONS (b) OR (c)
HEREOF SHALL PRECLUDE THE COMPANY FROM BRINGING ANY SUIT,
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT IN THE COURTS OF ANY PLACE WHERE THE GUARANTORS OR
ANY OF THE GUARANTORS' PROPERTY OR ASSETS MAY BE FOUND OR
LOCATED. TO THE EXTENT PERMITTED BY THE APPLICABLE LAWS OF
ANY SUCH JURISDICTION, THE GUARANTORS HEREBY IRREVOCABLY
SUBMIT TO THE JURISDICTION OF ANY SUCH COURT AND EXPRESSLY
WAIVE, IN RESPECT OF ANY SUCH SUIT, ACTION OR PROCEEDING, THE
JURISDICTION OF ANY OTHER COURT OR COURTS WHICH NOW OR
HEREAFTER, BY REASON OF ITS PRESENT OR FUTURE DOMICILE, OR
OTHERWISE, MAY BE AVAILABLE TO IT.
(e) IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND
ANY RIGHTS OR REMEDIES UNDER OR RELATED TO THIS AGREEMENT OR
ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR
THAT MAY IN THE FUTURE BE DELIVERED IN CONNECTION WITH THE
FOREGOING, EACH PARTY HEREBY AGREES, TO THE EXTENT PERMITTED
BY APPLICABLE LAW, THAT ANY SUCH ACTION OR PROCEEDING SHALL
BE TRIED BEFORE A COURT AND NOT BEFORE A JURY AND EACH PARTY
HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY
OBJECTION THAT IT MAY HAVE THAT EACH ACTION OR PROCEEDING HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM.
17. Notices. Any notice hereunder shall be in writing,
and shall be delivered by overnight courier service, by facsimile
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with proof of transmission, or by certified mail, postage prepaid, return
receipt requested, addressed as follows:
If to the Guarantors:
▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇.▇. ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇ & Cumberland Co., L.P.A.
▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Company:
Armor Holdings, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇ ▇▇▇▇▇▇▇, P.C.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
Notices sent by overnight courier service shall be
deemed delivered on the next business day, and notices sent by certified mail,
postage prepaid, return receipt requested, shall be deemed delivered three
business days after the date of mailing thereof.
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IN WITNESS WHEREOF, the parties have duly executed this
Agreement on the day and year first written above.
GUARANTORS:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
Sworn to before me this
26th day of August, 1996
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Notary Public
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
Sworn to before me this
___ day of __________, 1996
____________________
Notary Public
COMPANY:
ARMOR HOLDINGS, INC.
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
President and CEO
Sworn to before me this
12th day of September, 1996
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
Notary Public
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